The personal blog of Reyn Bowman, a Durham NC resident, 40-year veteran of community-destination marketing and still an explorer in community sense-of-place. Opinions expressed here are those of the author.

Tuesday, May 10, 2011

A Proposal To Eliminate Poverty Without Spending One Dime More Than We Do Now

In constant 2007 dollars those with the lowest 20% in terms of income in this country today have double the income they had when I was born in 1948.

The line currently below which people are considered poor is $11,200. What some term our “welfare state” current spends $16,480 per poor person. Of course a good chunk of that feeds the bureaucracy and never makes it to poor people.

The $550 billion the US government spends on means-tested programs to reduce poverty (excluding Medicaid spending for nursing home residents) is enough, if distributed quarterly each year directly to poor people, to eliminate poverty altogether.

Currently aid distribution through various programs collectively reduces the poverty rate less than 1% while perpetuating a huge bureaucracy, lobbyists and political capital.

Dr. Munger believes we could do more, much more and touched on some solutions. He noted that part of the problem is that capitalism is arbitrary and cited some including what trickle-down-guru David Stockman terms today’s disemboweled, off-shored economy on Main Street.

He seems to agree with George Washington’s farewell-speech caution (co-authored by Alexander Hamilton) about the dangers inherent in self-perpetuating political parties given as he departed from office after his second term as the nation’s first President.

Dr. Munger is a proponent of tax reform to close loopholes. He seemed to agree that poverty is a problem of wealth and distribution, not rich vs. poor. He pointed out examples showing that the rich had merely worked the political system to their advantage and he was much tougher on elected officials for playing the politics that permits it.

Dr. Munger touched on our collective reluctance as a society to “trust” poor people to do the right thing if the funds to eliminate poverty were distributed directly.

“…freedom should not be the ultimate end of politics. The ultimate focus of political activity is the character of the society. Political, religious, and social institutions influence the unconscious choice architecture undergirding behavior. They can create settings that nurture virtuous choices or they can create settings that undermine them…

…You can pump money into poor areas, but without cultures that foster self-control, you won’t get social mobility….Everything came down to character, and that meant everything came down to relationships, because relationships are the seedbeds of character.

The reason life and politics are so hard is that relationships are the most important, but also the most difficult, things to understand….character and culture really shape behavior, and… government could, in limited ways shape culture and character.

…government should not run people’s lives. That only weakens the responsibility and virtue of the citizens. But government could influence the setting in which lives are lived. Government could, to some extent, nurture settings that serve as nurseries for fraternal relationships. It could influence the spirit of the citizenry…

…The social fabric is based on the idea that effort leads to reward. But very often, government rewards people who have not put in the effort. It does this with good intentions…and it does it with venal intentions…By separating effort from reward, they pollute the atmosphere. They send the message the system is rigged and society is corrupt.

…Aristotle wrote that legislators habituate citizens. Whether they mean to or not, legislators encourage certain ways of living and discourage other ways.